Nutanix Inc - A (NASDAQ:NTNX) Reports Q4 Earnings Beat Amid Mixed Market Reaction

Nutanix Inc - A (NASDAQ:NTNX) reported fourth-quarter fiscal 2025 financial results that demonstrated robust operational performance, though the market's immediate reaction appeared mixed as shares declined in after-hours trading. The hybrid multicloud computing leader posted revenue of $653.3 million for the quarter, representing 19% year-over-year growth, while non-GAAP earnings per share came in at $0.37.

Financial Performance Versus Expectations

The company's revenue slightly missed analyst expectations of $654.1 million by approximately 0.2%, while earnings per share significantly exceeded the consensus estimate of $0.33 by approximately 12%. This earnings beat marks the seventh consecutive quarter where Nutanix has surpassed EPS expectations, demonstrating consistent execution on profitability metrics.

For the full fiscal year 2025, revenue reached $2.54 billion, representing 18% growth compared to fiscal 2024. The company achieved a non-GAAP operating margin of 21.1%, expanding 490 basis points year-over-year, while generating strong free cash flow of $750.2 million, an increase of $152.5 million from the prior year.

Key Operational Highlights

Annual recurring revenue reached $2.22 billion, growing 17% year-over-year, while the company added over 2,700 new customers during the fiscal year. Gross margins showed significant improvement, with GAAP gross margin expanding 200 basis points to 87.2% in the fourth quarter and non-GAAP gross margin reaching 88.3%, up 140 basis points.

The company's Rule of 40 score reached 48 for the second consecutive year, indicating strong balance between growth and profitability. Management highlighted progress with strategic partnerships, including new or enhanced agreements with AWS, Pure Storage, NVIDIA, and Google, alongside continued innovation across their cloud platform, particularly in modern applications and AI capabilities.

Forward Guidance and Market Positioning

Looking ahead, Nutanix provided first-quarter fiscal 2026 revenue guidance of $670-680 million, which compares favorably to analyst estimates of $694.2 million for the quarter. For the full fiscal year 2026, the company expects revenue of $2.90-2.94 billion, slightly above the analyst consensus of $2.98 billion.

The company also anticipates maintaining strong profitability, projecting non-GAAP operating margins of 19.5-20.5% for Q1 and 21-22% for the full year, with free cash flow expected to reach $790-830 million in fiscal 2026.

Market Reaction and Analysis

The after-hours stock decline of approximately 6% appears to reflect investor concerns about the revenue miss and conservative near-term guidance, despite the strong earnings beat and solid fundamentals. This reaction suggests the market may be focusing more on top-line growth metrics rather than the company's significant profitability improvements and strong cash generation.

The company's announcement of a $350 million increase to its share repurchase authorization indicates confidence in its financial position and commitment to returning value to shareholders. Recent strategic developments, including being named a Leader in The Forrester Wave™ for Multicloud Container Platforms and securing a long-term contract with Finanz Informatik, demonstrate continued market traction in enterprise computing solutions.

For more detailed earnings analysis and future estimates, readers can review the earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.